EUR/USD fell during the session on Friday again, but did get a bounce towards the end of the day to form a hammer. This hammer is sitting just below the 1.23 level, and on top of what would be the up trending line of a rising wedge. Because of this, we think the bottom of this hammer is a substantial point in this market.
We essentially have a binary trade at this point. If we break the highs of the Friday session, it is a buy signal that we could take for short-term trade. If we break the bottom of the candlestick from Friday, it would be a violation of support and we would be more than willing to sell and hold short positions in this pair.
Quite frankly, we don’t like buying the Euro at all. But a break of the top of Friday’s hammer does suggest a quick and 75 or 100 pips profit waiting to be had. Nonetheless, we do prefer selling this market and are hoping to see the bottom give way from Friday.
Written by FX Empire